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The Psychology of Freemium Gaming: Gates, Walls and Curves.

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Freemium games often have very low difficulty curves, and low barriers to success, as part of their casual nature. However, they will usually corner players with a paywall after the introductory rush of success has worn off.

Paywalls aren’t all created equal- some can block players from continuing easily, while others are used mainly to add extra features. A “soft” paywall might be something like the ability to unlock a bonus character or go to a new level for a fee. A “hard” paywall might be requiring hard currency for weapon upgrade, making characters progressively underlevelled without payment, or blocking their ability to resurrect themselves.

While a freemium game blocking progression outright is thankfully uncommon, many casual games will instead make progressing easy but perfection impossible for free players.
Some freemium games, such as Minion Rush, will leave actual gameplay intact, confining paywalls to cosmetic items. MR keeps most upgrades feasible, the main pay incentive being costumes that provide currency or skill boosts. While a skill upgrade can be earned in half an hour of competent play, new costumes could take days of high-level play to achieve.

Other games, like Asphalt 8, embed paywalls into every gameplay area, making perfection impossible without emptying your wallet. Each car has multiple upgrades, consuming an increasing amount of credits, but will still be made obsolete by the next stage of cars. Racing seasons require multiple cars, while many achievements revolve around collecting specific sets of cars, encouraging people to spend mostly for accomplishment instead of enjoyment.

Games like Asphalt 8 are to many the villains of freemium; design choices turning “free-to-play” into “pay-to-win”.

Hard paywalls lead to the most exploitative problem in freemium gaming: greed superseding design. Put more bluntly, if a developer wants people to pay more instead of playing more, then either their design or their ethics are flawed.